Healthcare Business News

Setting the record straight on Maryland's reimbursement agreement with the CMS, and other letters

By Modern Healthcare
Posted: February 1, 2014 - 12:01 am ET

I was disappointed in the Jan. 18 editorial, "A bold experiment in per capita spending limits" which included several inaccuracies and mischaracterized key aspects of Maryland's new reimbursement agreement with the CMS. First, it's important to correct the errors. Maryland has not committed to limit per capita hospital cost growth to the national GDP minus 0.5% for 2015 through 2018. Rather, the state has agreed to limit hospital cost growth based on the state's economic growth, to a 3.58% per capita annual cap. Also, the state has agreed to directly reduce Medicare hospital spending by $330 million over five years (which would amount to an estimated 0.5% less than the national spending trend); this would be measured by comparing Maryland's Medicare per capita total hospital spending to the national Medicare per capita total hospital spending. Also, Maryland's experience with capped payments has not come via critical-access hospitals (which do not exist in the state). Rather, 10 hospitals with sizable capacity (as many as 280-plus beds), have joined a total patient revenue system in which annual budgets are fixed by the state's rate-setting commission regardless of patient volume and services provided. Finally, while it's true that Maryland's per capita Medicare hospital costs are high, Maryland's system has enabled the state to slow the pace of Medicare spending growth when compared with the national average (the waiver was initially granted in the 1970s as a way to test a new, equitable way of providing care, especially to uninsured people, and required Medicare to pay the same rate as private insurers, not the other way around). Also, the editorial fails to mention that the increased per capita costs are offset in several ways, such as reduced federal subsidies for people receiving coverage through the state's health exchange and reduced insurance costs for federal workers, who number about 300,000 in Maryland. Of greater concern is the editorial's myopic focus on capping payments. That line of thinking suggests that cost savings are the sole motivator in this new agreement. Nothing could be further from the truth. This agreement is about crafting a model built on cost and quality incentives to create a system of care that is sustainable, and more importantly, places the focus of healthcare delivery where it should be—on keeping people and populations healthy. This agreement is much more than a series of numbers and metrics. It's about the chance to effect a broad-based, forward-thinking reinvention of healthcare as we know it.

Carmela Coyle
President and CEO
Maryland Hospital Association

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Encouraging to see bipartisan support for Medicare-oriented reforms

It's promising and encouraging to see bipartisan support for a program that will tackle quality and cost issues and not deal with coverage, as the Affordable Care Act has attempted (Jan. 27 cover story, "New path to Medicare cost control"). This is the reform—Medicare-oriented—that should have been advanced earlier. Maybe now, given the implementation issues with the ACA, the folks in Washington can advance alternatives such as the one proposed.

Rich D'Amaro
Managing Partner
Subsidium Healthcare, Atlanta

Increase in ED visits to continue; hospital execs can offer a cure

It comes as no surprise that the volume of ED visits has gone up with the expansion of insurance coverage ("More—not fewer—newly insured in Oregon making unnecessary trips to ER, study finds"). I predict that the volume of admissions will increase as well and with it a concomitant increase in payer denials. It's a no-brainer. While it is a multifaceted issue and not easily analyzed, it can be remedied. Will hospital executives be willing to create primary-care services contiguous with the emergency department or nearby on their campuses? Will hospital execs be willing to invest in positioning a hospitalist or nurse practitioner at the triage desk to comply with the required medical screening under EMTALA? Will they be willing to capture statistics on why the ED is being flooded with nonemergent service requests so they can objectively plan services that better meet the community's needs? Evidence about non-emergent use of the ED has been bandied about for decades. It's time to take action instead of complaining.

Stefanie Daniels
President, managing partner
Phoenix Medical
Pompano Beach, Fla.

Latest merger shows need to align population health strategies

Regarding the recent story "CHS-HMA deal hikes pressure on smaller systems, hospitals", this is one more “big” reason for hospitals and the population health experts in local public health to align strategies to meet the health needs of their shared community.

Sue Lynn Ledford
Director, Public Health Division
Wake County Human Services

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